Article
Review of financial market development in countries and the world crisis
Preface
Should distinguish between two concepts of economic growth and economic development . Economic growth is a quantitative concept, where economic development is a qualitative one. Various resources of economic growth are increase in implementation of capital increase or labor, increase of economic efficiency increase of productivity of production factors, and implementation of probable empty capacities in economy and economic development is growth accompanied by increasing production capacities either physical, human, or social capacities. Just in case In economic development, quantitative economic growth are obtained, but besides social institutions are evolved, insights are changed, exploitation potential from available resources is increased continuously and dynamically, and new innovations are introduced every day. Besides one can say that combination of production and relative share of capital increase changes in production process .Development is a comprehensive matter in the society, so that it cannot occur in a single sector of it. Development has not any particular limit, boundary, and roof, but since it depends on human, it is a qualitative (contrary to economic growth which is exactly quantitative) phenomenon which has not any limit.
Meaning of financial markets in terms of economic development
Drawing plan of economic flowering through extending trans boundary relationships in this field and having generative relations with organizations such as WTO and Davous meeting in near futures depends on our present attempts for cautionary from existing relationships. Our most important consequence can be that the obtained teachings in such a particular conditions be our supplies and capital of future path.
But if it is to prevent from falling into another debt crisis, part or perhaps a large part of the money should be allocated to the financial aids. In the past, aids were accompanied with all sides conditions which part of it executed monetary and financial contractional policies- exactly contrary to what we now require- and imposed financial regulation-clearing and releasing, which were of the main causes of the crisis.
In many of the world areas, because of some clear reasons, uniting with the International Money Fund has been accompanied with great disgrace which not only loan-takers but also loan-holders are not satisfied with it. Today, resources of cash funds exist in Asia and Middle East, but the question is that why these countries should put their money in organizations in which their right of vote is limited, and often impose policies which are contrary to their values and beliefs.
In the meeting of G20 leaders in November 2008, supporting-orientation was condemned and these countries made a commitment not to engage into such a policy. Unfortunately, the case study of the World Bank shows that 17 out of 20 mentioned countries in practice took action in new supportive-oriented, which the most important of them were the US, who has put the requirement of "purchasing US commodities" in their economic motive pack. But it is a long time that has been verified that subsidies can be as destructive as customs tariffs – and even more unjust than that, because the wealth countries can benefit from it better. If there has been a field of a constant race in the world economy, nowadays there is not such a game; perhaps subsidies and monetary aids of the US have changed everything as irreversible.
Banking systems in Islamic countries
Malaysia In Malaysia Banking Systems, this matter has attracted the people so much that the people's depository in Malaysian Islamic Banking System has reached from 70 milliard ringuit in 2004 to 83 milliard ringuit at the end of the year 2005. According to the annual report of Malaysian Central Bank, for the time being the value of people's deposits in Islamic Banking System has reached to the record of 1.12% of the total internal depositories of the Malaysian Banking System. Meanwhile, the paid loans from Islamic Banking System in the same time have increased by 4.67 milliard ringuit which is equal to 12%. Malaysian Central Bank has aimed reaching to standard limit of 20% by the end of 2010. Therefore, the foreign banks had showed a great tendency for representing Islamic Banking services in this country. Over than 800 experts and bank managers have participated in this seminar.
Indonesia The Indonesian governing category as knowledgeable individuals class through the world are fearing encountering with the danger of another bank crisis. Following it the government guarantees bank deposits of over than 210000$. In the previous law this figure was 10000$. This program was just an example (see the attached chart). After the 1997-98 crisis the deposit guarantee law for preventing from future crisis was compiled. But Indonesia is now potentially encountering a new crisis, and the authorities have reacted by increasing deposits guarantee top. The deposits guarantee level has been increased 21 times, but the crisis is still waiting in ambush.
Developing countries and the world crisis:
Probably this year after the World War II is the worst year for world economy, as the World Bank anticipates a decrease of up to 2 percent. Even the developing countries which perform all the jobs right and on time- and have relatively better macro economies and setting policies comparing to the US- are experiencing crisis pressure. China, primarily because of its hasty decrease in export, probably continues its growth with a speed much less than its yearly rate of growth of 11-12 percent in recent years. The recent crisis will make poor almost 200 million people, unless a special work is done This global crisis requires a global answer, but unfortunately, the responsibility of answering remains on the national level. Each of the countries tries to represent its economic motive package for increasing effects on its citizens, but not on the global level. In the measurement of motive sizes, the countries measure the cost of inspecting to their budgets with the profits obtained based on growth and employment increase obtained in that way in their economy. Since some of the profits (mainly about small and open economies)belongs to others, the packages of economic motives probably smaller than what it may be otherwise, have been designed. The same thing shows why we require a pack of economic motive harmonious in the global level. In many of the world areas, because of some clear reasons, uniting with the International Money Fund has been accompanied with great disgrace which not only loan-takers but also loan-holders are not satisfied with it. Today, resources of cash funds exist in Asia and Middle East, but the question is that why these countries should put their money in organizations in which their right of vote is limited, and often impose policies which are contrary to their values and beliefs. Eventually it seems that many of the improvements suggested in the field of leading International Money Fund and Global Bank, - are obviously affected by this fact that how the chiefs of these institutions have been Selected – are under consideration. But the process of improvement is moving very slowly, and the crisis will not wait for us. Therefore, it is necessary that the monetary aids; beside, or instead of, being solely by International Money Fund, to be from different ways, including area organizations. It is possible to create new loan-giving facilities accompanied by leading structures which are more homogenous with 21st century. If it would be possible to quickly make it operational, (where I believe we can) such facilities are the best way for paying the money.
In the meeting of G20 leaders in November 2008, supporting-orientation was condemned and these countries made a commitment not to engage into such a policy. Unfortunately, the case study of the World Bank shows that 17 out of 20 mentioned countries in practice took action in new supportive-oriented, which the most important of them were the US, who has put the requirement of "purchasing US commodities" in their economic motive pack. But it is a long time that has been verified that subsidies can be as destructive as customs tariffs – and even more unjust than that, because the wealth countries can benefit from it better. If there has been a field of a constant race in the world economy, nowadays there is not such a game; perhaps subsidies and monetary aids of the US have changed everything as irreversible. In fact, even commercial organizations in advanced industrial countries which do not receive subsidies are benefittin from unjust advantages. These organizations knowing that in case of a bankruptcy there will be somewhere supporting them as monetary aids; can accept risks that the others cannot afford accepting it. Besides it is possible to understand internal political requirements which results in monetary and subsidiary warrantees, the developed countries should recognize its world consequences, or represent compensative aids to developing countries.
One of the important medium-term innovation which was emphasized by the United Nations Commission, was the coordination committee of world economy, which not only coordinates economic policies, but also is engaged in evaluating impending problems and essential gaps. The deeper the economic stillness becomes, probably the more various countries are face to face of bankruptcy. But we still do not have a capable frame for behaving with such problems.
Source specifications:
1-Developing Countries and the Global Crisis(by Joseph E. Stiglitz), Journal of Turkish Weekly (JTW), 16 April 2009
2- Dr. Mostafa Salimifar, development economy, Movahed pub.2003
3-Dr. Mahmood Motevasseli, economic development, study and compilation org. of human sciences books of universities (SAMT), 2003
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